Warding Off Job-Killing Local Licensing

Momentum for occupational licensing reform continues to grow on the state level and in Washington, D.C. Though there have been many meaningful reforms in states like Mississippi and Arizona, Tennessee is the clear leader in the nationwide push to reform out-of-control licensing laws. Forward-thinking Tennessee state policymakers not only reformed state licensing — they also addressed licensing on the local level.

Tennessee passed The Freedom to Prosper Act during this year’s session. The bill, sponsored by Senator Kerry Roberts in the state Senate and Rep. Kent Calfee in the House, stops local governments from creating any new occupational licenses. Freedom to Prosper passed by an overwhelming margin, with only two Senate members voting against it, showing the popularity of reforms that promote economic opportunity.

Tennessee’s local licensing preemption bill follows the model pioneered in Wisconsin last year by Rep. Dale Kooyenga. He was moved to act when he saw that occupations such as Christmas tree sellers and secondhand dealers require licenses in several Wisconsin communities. In a particularly ridiculous instance, Milwaukee even required photographers to get a license, ignoring the reality that, as Rep. Kooyenga succinctly put it, “photography clearly poses no threat to public safety.” If this reform had been passed a decade ago, it is estimated that 100 fewer occupations across Wisconsin would require a local license today.

Last year, Tennessee passed the Right to Earn a Living Act, which ordered a systematic legislative review of the state’s licensing laws to determine if they unnecessarily interfere with Tennesseans’ ability to work. If implemented correctly, this legislation will return occupational licensing to its original purpose of protecting the public from risk instead of protecting special interests from competition. Not wanting this hard-fought progress on the state level to be undone by runaway local governments is one reason why Tennessee policymakers passed Freedom to Prosper this year.

Tennessee desperately needed state-level reforms, as over 100 different jobs require a state license, and at least 50 of these licenses are for low- and moderate-income occupations. Until recently, the state even licensed shampooers, a harmless occupation that was only licensed in four other states. Yet people who shampooed hair for money in Tennessee had to train for 70 days and pay $140 in fees. Fortunately, after the nonprofit Beacon Center of Tennessee filed a lawsuit challenging these ridiculous requirements, Gov. Bill Haslam and lawmakers eliminated this license earlier this year. After the Right to Earn a Living Act’s initial reviews are finished, it is likely that more indefensible licenses like this will fall off the books.

Though most states’ legislative sessions are over for the year, a few states like Michigan have year-round sessions. Like Tennessee, Michigan has made significant progress on state-level licensing reform, but Michigan policymakers should take their efforts further and stop local governments from making it harder for people to earn a living.

Consider Detroit, where the city licenses about 60 occupations. Half of these licenses impose extra fees and requirements on top of existing state-level licenses, and the other half are for occupations that are not regulated by the state.

Detroit licenses occupations from window washers, who pay a $72 yearly fee, to pawnbrokers, who pay a $984 yearly fee. Even sidewalk shovelers, dry cleaners, and furniture movers need licenses to legally work in Detroit. It is counterproductive for a struggling city to regulate these occupations when other large Michigan cities like Grand Rapids, Lansing, and Ann Arbor can maintain public safety, consumer protections, and fair competition without local licensing.

Throughout the country, local governments are making it more difficult for their residents to work. In Florida, for example, each year it costs $447 to be a vehicle mechanic in Palm Beach, $236 to work as an interior decorator in Miami, and $157 to be a florist in Ft. Lauderdale. In Kansas City, Missouri, photographers have to pay $300 a year. Across the state in St. Louis, outhouse cleaners must pay $100 a year to work. These payments are required regardless of a person’s revenue or income, which means that they harm new workers and small businesses the most.

The progress that has been made on reducing occupational licensing on the state level should be applauded, but there is still work to be done to promote economic opportunity across the nation. As state policymakers across the country continue reforming broken licensing schemes, they should remember the examples set by Tennessee and Wisconsin and address the problem on the local level, too.

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